What are Challenges of Automotive Technology?

The European automotive industry has successfully attained record sales and reached the top of the global industry.

FREMONT, CA: The technological advancements and fundamental changes in the automotive industry pose a threat to Europe's lead position. The industry is witnessing strong headwinds because of new emissions standards, autonomous driving, sharing, and connected cars. The buyers are being forced out of their fuel frugal diesel city cars into gasoline-powered vehicles. This is creating problems for the manufacturers and increasing the average fleet fuel consumption.

Business models offering car ownership 

Despite traditional buying and leasing models being available, consumers are inclined to business models offering monthly subscriptions. They sign up for the service they want and then cancel when they are done. Such service providers give consumers access to vehicles, insurance, and maintenance. Apart from this, many service providers offer access to a marketplace of pre-owned vehicles. This reduces the possibility for consumers to invest in the concept of owning a vehicle. Moreover, parking costs and maintenance costs are shifting expectations of consumers. It then becomes a challenge for companies to shift from traditional B2C channels to the B2B channel.

Smart vehicle technology 

The introduction of smart vehicle technology will revolutionize the way cars interact with each other and with the roads. It is being rolled out slowly in a few countries to better the road network. If it reduces road accidents considerably, it can change the way vehicle insurance works. Moreover, technologies like artificial intelligence and smart assistants into vehicles will allow drivers to integrate their time spent on driving with other parts of their lives and daily routines. Adopting these technological developments and being agile in responding to resulting consumer demand changes will be a significant challenge for companies in the European automotive industry.

Demand for environmentally sound vehicles

The growing positive perception of non-combustion engines amongst consumers is compelling automakers to develop hybrid and electric vehicles. The decreasing market share of diesel cars and increasing demand for environmentally sound vehicles add to the client's woes. With the increasing awareness of the broader environmental implications of driving and stringent regulations, reassuring consumers of business's environmental credentials and considerations will be a significant challenge for companies.